Plug Power has introduced the “first-ever” spot pricing programme for liquid green hydrogen, with S&P Global Platts set to publish a weekly price based on real-time supply and demand.
Spot pricing offers Plug clients lower costs, transparency, and flexibility while enabling Plug to maximise peak prices during high demand, expand its customer base, and boost market liquidity.
The strategy will allow industries like retail, manufacturing and power generation to optimise supply based on real-time demand. Plug Power has said it entered into spot pricing agreements with “several key industrial players,” underscoring “widespread industry endorsement.”
If customers want to purchase hydrogen at the published price – released every Thursday – they must have a spot agreement in place with Plug. From then, Plug will execute a transaction agreement to accept a customer tanker at one of its plants for a fill.
The company’s operating plants in Louisiana, Georgia and Tennessee reportedly produce 45 tonnes per day of liquid green hydrogen, and they will all participate in the spot pricing programme. Full capacity was hit at the latter two plants in April last year (2024).
Read more:Plug Power hits full capacity at two US liquid green hydrogen plants
As the only producer of liquid green hydrogen on a commercial scale in North America, Plug Power will “enhance the accessibility and affordability of green hydrogen,” according to its CEO, Andy Marsh, and it will accelerate “adoption across various sectors.”
The CEO added, “We believe this initiative will increase trust and transparency in the industrial hydrogen market. In five years, we anticipate most buyers will tap into the spot market to benefit from the flexibility it offers them.”
Plug President, Sanjay Shrestha, also said the strategy will help the company run its plants more efficiently and maintain “economies of scale and scope, and ultimately, maximise return on capital investment.”
A spot pricing mechanism could stimulate demand in the hydrogen industry, which is still developing.
However, unlike long-term offtake contracts, it could expose buyers to price fluctuations, making budgeting more challenging, and offers no supply guarantees if demand outstrips availability.
Additionally, without stable revenue streams through power purchase agreements (PPAs), hydrogen producers may struggle to secure funding for new projects.
Read more about demand creation in the hydrogen industry this month on H2 View and in our February Large-Scale Projects magazine.
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